Bill Text: CA AB2060 | 2009-2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Public contracts: fixed price contracts: sales and use

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-09-30 - Vetoed by Governor. [AB2060 Detail]

Download: California-2009-AB2060-Introduced.html

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BILL NUMBER: AB 2060	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Charles Calderon

                        FEBRUARY 18, 2010

   An act to add Section 6376.3 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2060, as introduced, Charles Calderon. Sales and use taxes:
exemption: fixed price contract.
   Existing law imposes a state sales and use tax on retailers and on
the storage, use, or other consumption of tangible personal property
in this state at the combined rate of 81/4% of the gross receipts
from the retail sale of tangible personal property in this state and
of the sales price of tangible personal property purchased from any
retailer for storage, use, or other consumption in this state that is
stored, used, or otherwise consumed in this state.
   This bill would, for any increase in the state sales and use tax
rate on and after the operative date of this bill, exclude from that
increased rate of tax, the sale of, and the storage, use or other
consumption in this state of, tangible personal property that is
subject to a fixed price contract entered into prior to the operative
date of the state sales and use tax rate increase, as provided.
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 6376.3 is added to the Revenue and Taxation
Code, to read:
   6376.3.  On and after the operative date of an increase in the
sales and use tax rate, to the date on which that increase in tax
rate ceases to be operative, there is exempted from the taxes imposed
by this part an amount equal to an amount that is attributable to
the increased rate of tax imposed with respect to the following:
   (a) (1) The gross receipts from the sale of, and the storage, use,
or other consumption in this state of, the following:
   (A) Tangible personal property, if the seller is obligated to
furnish or the purchaser is obligated to purchase the property for a
fixed price pursuant to a contract entered into prior to the
operative date of the increase in the sales and use tax rate.
   (B) Materials and fixtures obligated pursuant to a construction
contract entered into for a fixed price prior to the operative date
of the increase in the sales and use tax rate. For purposes of this
subparagraph, "fixed price" means the prices or price specified in
the construction contract is a lump sum price or a stated unit price
or a guaranteed maximum price, and the construction contract does not
authorize an increase in price due to an increase in the rate of
sales and use taxes. For purposes of this subparagraph, "guaranteed
maximum price" means that the price specified in the construction
contract is for actual costs plus a fixed fee, but subject to a
maximum price.
   (2) For purposes of this subdivision, tangible personal property
shall not be deemed obligated pursuant to a contract for any period
of time for which any party to the contract has the right to
terminate the contract upon notice, whether or not the right is
exercised.
   (b) A lease of tangible personal property that is a continuing
sale of the property for any period of time for which the lessor is
obligated to lease the property for an amount fixed by the lease
prior to the operative date of the increase in the sales and use tax
rate. For purposes of this subdivision, the sale or lease of tangible
personal property shall be deemed not to be obligated pursuant to a
contract or lease for any period of time for which any party to the
contract or lease has the unconditional right to terminate the
contract or lease upon notice, whether or not that right is
exercised.
   (c) The possession of, or the exercise of, any right or power over
tangible personal property pursuant to a lease that is a continuing
purchase of the property for any period of time for which the lessee
is obligated to lease the property for an amount fixed by a lease
entered into prior to the operative date of the increase in the sales
and use tax rate. For purposes of this subdivision, the storage,
use, or other consumption of, or possession of, or exercise of any
right or power over, tangible personal property shall be deemed not
to be obligated pursuant to a contract or lease for any period of
time for which any party to the contract or lease has the
unconditional right to terminate the contract or lease upon notice,
whether or not the right is exercised.
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.